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Journal of Finance Vol. 58 No. 1 2003

The Quiet Period Goes out with a Bang

Daniel Bradley1,2; Bradford D. Jordan1,2; Jay R. Ritter3,4

1 George Washington University · 2 Clemson University · 3 University of Jordan · 4 University of Florida

open access

Abstract

We examine the expiration of the IPO quiet period, which occurs after the 25th calendar day following the offering. For IPOs during 1996 to 2000, we find that analyst coverage is initiated immediately for 76 percent of these firms, almost always with a favorable rating. Initiated firms experience a five‐day abnormal return of 4.1 percent versus 0.1 percent for firms with no coverage. The abnormal returns are concentrated in the days just before the quiet period expires. Abnormal returns are much larger when coverage is initiated by multiple analysts. It does not matter whether a recommendation comes from the lead underwriter or not.

DOI
10.1111/1540-6261.00517
Volume
58
Issue
1
Pages
1-36
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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